Decomposing the gender reservation wage gap in Italy: A regional perspective

We investigate the determinants of the reservation wage gap between unemployed men and women, using data from the Italian Labour Force Survey. We conduct detailed decomposition analysis at the mean and at different percentiles of the reservation wage distribution using the Recentered Influence Function regression approach. Given the regional differences in labor market participation and employment rates across Italy, we focus on regional differences in the gender reservation wage gap. We find evidence of a positive gender reservation wage gap, which is highest in the South, with men reporting higher reservation wages across all regions and at all percentiles of the reservation wage distribution. The decomposition results suggest that, while a large part of the gender gap in reservation wages is explained by personal characteristics such as education and age, a significant portion of the gap is explained by different job preferences (especially commuting and working time preferences) between men and women. We also find evidence of differences in the relative effects of personal, household and job characteristics across regions, and at different percentiles of the reservation wage distribution.